Ongoing efforts in this area include: improving methods for performing free energy perturbation calculation by adding new features and options such as a potential of mean force to remove noise associated with high frequency vibrational motion, improving and evaluating methods for treating solvent implicitly to provide for hydrophobic effects without the explicit inclusion of water molecules, methods to properly treat electronic polarization in molecular dynamics simulations, and continuing the development and evaluation of more accurate flexible water models. Projects include the analysis of hysteresis in free energy perturbation simulations, slow growth homology modeling applied to model systems and homologous proteins, development of quantum mechanical potentials and appropriate algorithms for use in molecular dynamics simulations, studies of excited state and electron transfer processes in biological systems, semiempirical Hartree-Fock calculations of proteins, new methods for long range truncation of the potential energy, and the development of software tools to automate inhibitor design and evaluation in order to be able to optimize lead compounds in rational drug design efforts. Many of the parameter sets and models that are generally available are of the quality required for accurate simulation of macromolecular systems. Therefore, parameter development efforts are restricted to areas of primary interest where the existing parameter sets are inadequate. Ab initio chemistry, crystal simulations, vibrational analysis, solvated molecular dynamics simulations, and free energy simulations are being used in this effort. One such example is the development of parameters for simple organic substituents to use in modeling lipids. Projects include development of van der Waals parameters for methylene and methyl groups, development and use of a polarizable and flexible water model, molecular dynamics simulation studies of DNA in both finite and repeating (infinite) systems, analysis of the protein parameter sets using carboxy-myoglobin, and conversion of physical models into three- dimensional coordinates.